Waitomo Caves tourism operator given $4 million as government ministers pinpoint 'strategic tourism assets' to be protected by taxpayers; Funding allocated to regional tourism organisations too

Waitomo Caves tourism operator given $4 million as government ministers pinpoint 'strategic tourism assets' to be protected by taxpayers; Funding allocated to regional tourism organisations too
Image sourced from Wikipedia

Discover Waitomo is the first “strategic tourism asset” taxpayers are rescuing with a $4 million payment.

A “Strategic Tourism Asset Protection Programme” was part of a $400 million tourism package announced at the Budget in May.

Businesses with “strategic tourism assets” can apply to the Ministry of Business Innovation and Employment for funding. The department will assess applications and make recommendations to a “Tourism Recovery Ministers Group”, which will have the final say on who gets funding.

The group includes the ministers of tourism, finance, Māori development, conservation, and the under secretary of regional economic development.

To be considered “strategic”, the tourism asset must be nationally and/or internationally recognised; a key attraction for New Zealand or a region of New Zealand; responsible for significant visitation to the region where it is located and, in its absence, visitation to the region would be significantly diminished; and generate significant spill over benefits to the region where it is located.

Applicants need to have exhausted all other forms of support (government and private) before being eligible for a cash payment.

Tourism Minister Kelvin Davis said it might not have been possible to preserve Discover Waitomo – a “key asset” – and help it retain a “highly skilled workforce with specific skills and experience” without taxpayer support.

Discover Waitomo is owned by the NZX-listed company, Tourism Holdings Ltd. It runs tours at Waitomo Caves for people to see glowworms and do black-water rafting.

Tourism Holdings on May 26 announced it was starting a restructuring process that would likely affect 140 staff from its Waitomo and Kiwi Experience businesses. 

Its share price was up 4.61% between market open on Thursday and the time of writing. However its share price was down 39.6% from a year ago.

Davis said that where there is urgent need to fast track applications ministers will respond quickly.

Applications under the Strategic Tourism Asset Protection Programme are open until June 18.

Davis also announced that up to $20.2 million has been made available for the country’s 31 Regional Tourism Organisations to help them support operations in their regions.

And, he appointed co-chairs to a new public-private taskforce that will continue work started by Tourism New Zealand to “reimagine the future of tourism”. The co-chairs are Rotorua Mayor Steve Chadwick and Tourism Holdings Ltd CEO Grant Webster.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

39 Comments

32
up

Govt should be taking a stake in these companies or issuing them a loan, not forking over our cash.

18
up

Sounds like an audit is required to me, how can that place not be a cash cow?

The cave was supplied free of charge so all the company has to do is tick a few H&S boxes and walk punters down the entrance while frantically pulling the cash register arm.

.

"Govt should be taking a stake in these companies or issuing them a loan, not forking over our cash."

Government should have negotiated a fixed income security (preferred share or bond) and then had warrants attached (with an exercise price at the then share price).

That would avoid moral hazard, and would get management to maintain sufficient liquidity or pay the price for insufficient liquidity in future. That way government supported the business, and they got compensated accordingly. The government could then sell the shares in the future in the market when conditions are improved. And the taxpayer would be a net beneficiary.

Any financial support for listed companies by government should be in a similar manner.

That sort of deal may have made management prefer to do a rights issue.

This assumes that the Big Brains in Gubmint know what a "rights issue", a "warrant" and all of them Terribly Technical Terms actually mean.....

The formation of Kiwicave. State owned tourism coming our way.

Kiwicave, why build houses?

Too much ventilation in a cave, but air movement is a good thing. No condensation problems.

These caves are full of water. They probably have condensation problems.

It's seepage, not condensation

"highly skilled workforce" is shurely an exaggeration - I'd be fascinated to learn how long the induction of a new hire would take. It's certainly not Nuclear Physics grade......

well we do have to import all the workers from offshore to work in a lot of our tourism industry so they must be otherwise why would we let them in sarc

I don't know. Like Chernobyl in 1986 it does glow in the dark.

PS, accidentily reported you, my bad.

You don't mean that - we have Nuclear GE'd Glow-worms in li'l ol' Godzone? Where's the Precautionary Principle when ya need it?

16
up

Hmm, I always did'n go there just because found it a bit expensive , now govt gives away the money I paid as taxes so that they keep the pricing so that I still believe they are a bit expensive . So I am paying for beating me . Rockstar economy must go on!

Waitomo is too far away from Hamilton and Taupo, unless a high speed railway is built.

It's also too far from Napier, Wellington, Christchurch, London, Tokyo etc.

Do you actually think high speed rail is viable with our very low population and very low population densities?

So what is this about. As Helen Clark said "foreigners don't take it with them"?

12
up

Discover Waitomo - Do they mean Waitomo.com? The one owned by Tourism Holdings Ltd (THL)? The same THL listed on the NZX and owned by shareholders? I wonder if that has anything to do with their share price being up over 15% today.

17
up

The very same. Notice THL hasn't put out a rights issue or anything, why should the shareholders stump up any cash when Johnny taxpayer will foot the bill? I'm absolutely disgusted by this lolly scramble with my tax dollars.

Immediately shows that "Applicants need to have exhausted all other forms of support (government and private) before being eligible for a cash payment." is a bald-faced lie.

Exactly my point. I'm not a shareholder in THL. But there are plenty of rights issues going on at the moment. Nearly every single one is being oversubscribed at the moment. So I'm sure they wouldn't have had any problem raising capital.

I've participated in a few recently, the ability to raise capital from shareholders is the bloody reason we have capital markets!

I wouldn't be surprised if the government officials and the Minister or whoever was approving these handouts didn't even know that the company was listed on the NZX. Or they might not have known what a rights issue was.

16
up

What are they protecting? The caves aren't going to collapse without cash. And highly skilled workforce? Is Davis having a laugh? If he thinks that is highly skilled, then no wonder he is rubbish at his job.

There's the rub. If the businesses fail, then a new owner will buy the assets and take on the risk. As harsh as it sounds, we should let businesses fail, particularly ones that are based on a natural asset which won't be going anywhere. Before anyone says "but what about the jobs!" remember if a business is sold it will hire new staff. Propping it up only prevents the staff from finding employment in a business that is viable.
Ugh macro issues bite - they make pragmatists sound like baby killers

10
up

I don't know what the hell to think anymore. Two weeks ago I thought Kelvin was awesome for actually being quite blunt and honest about tourism. Boy that changed quickly, disgusting.

Kelvin is, was, has always been totally incompetent. How on earth he became deputy leader is unbeknownst to me

You gotta wonder what he has that made him deputy material

This is NOT the govt's job to pick winners and losers like this without conditions.
Just keep running it poorly and the govt will keep giving you money.

12
up

Left wing mentality. Shut down the oil and gas industry but keep the cave economy alive?

Every glass is half empty - or so it would seem, in these comments!

THL same company that offered Motorhome for $29 per day.

Also THL must be very well aware that come what may government has to and will come to bailout their National asset so has the government checked what they have done themself besides giving $29 motorhome before availing the money. Not saying that have not but just raising a question.

the same company that quoted me over $130 a day when i inquired about using them to enable my staff to stay on site during the lockdown - providing 24/7 care in dementia and mental health facilities - but charge the government a couple of thousand a week to use them for quarantine

RORT RORT RORT -- if we bail them out then lets take a substantial stake - the company can always have a buy back clause inserted to allow them to buy the government out - at cost +10%

Stuff Article 2018

Tourism operator THL nearly doubled its annual profit as it expanded to become a global company.

Chairman, Rob Campbell said the company had made another record profit from trading of $37.5m, up 24 per cent, on turnover of $426m, up 25 per cent.

Sickening... free handouts for private enterprises without the government getting an ownership share.

Handouts everywhere, government throwing fiscal responsiblity to the wind...

what sort of people would take this money? Enough to pay for 200 part time tutors in low decile schools. They should publish the top ten salaries.

It's a shambles. The business could and should have done a large rights issue to shore up its finances. Instead it's getting free taxpayer money. Even Air NZ didnt get free money, it got the offer of an expensive loan which thus far it hasn't drawn down.

FYI, THL did a rights issue in July 2019 (just over 10 months ago) and raised $50mn

https://www.nzx.com/announcements/337063

https://www.nzx.com/announcements/337818

Your access to our unique content is free - always has been. But ad revenues are under pressure so we need your direct support.

Become a supporter

Thanks, I'm already a supporter.